New Jersey Tax Revolution Roundup: Taxing, Spending, Salaries, and Solar Energy Incentives

Some odds and ends for you to browse this evening.

From the Courier-Post Online:

The new head of Burlington County government has pledged to continue the tax-cutting policy of the county board of freeholders.

Freeholder-Director Bruce Garganio of Florence also said he was truly grateful for the opportunity to serve as director in his freshman year on the board....

"We owe this to the taxpayers of Burlington County," Bruce Garganio of Florence said of trimming the county property tax levy further during his state of the county speech at the yearly reorganization on New Year's Day in the Olde Burlington County Courthouse.

The Press of Atlantic City discusses how New Jersey's "incentives" (that's taxpayer money being funneled into selected businesses) are affecting the renewable energy market. Three highlights: Business owners with no experience, operators of solar facilities earning ten times the market value for energy (60 cents per kilowatt vs. 6 cents), and a lot of startups but no regulation.

The major attraction has been the state's financial incentives, which New York-based Global Solar Center called "the most generous incentives for solar power in the nation." The most notable one may be the Solar Renewable Energy Certificate, a credit-based system adjusted in 2006 to capitalize on the state Energy Master Plan's mandate that 20 percent of the state's energy come from renewable sources by 2020.

The use of the solar certificates has helped New Jersey grow its solar power industry in a hurry by making solar energy profitable.

Operators of solar energy sites, from large commercial facilities down to homeowners, can earn credits for every 1,000 kilowatt hours of electricity they produce. The credits can be sold to other energy companies seeking to meet their renewable energy goals.

With a solar certificate, an operator of a solar facility can earn 60 cents per kilowatt hour, said Joe Isabella, director of the Vineland Municipal Electric Utility. In the traditional wholesale energy market, a kilowatt is worth about 6 cents.

In another sign of local fiscal pressure's ability to roll back entitlements that have gone too far, The Daily Journal reports that Millville is preparing to renegotiate its union contracts. It's pretty clear why:

Millville reached a contract with its firefighters in September 2008. The five-year deal gave firefighters a 3.6 percent raise the first year and 3.8 percent annual raises for the remainder of the contract....

Council 18 members -- who include maintenance workers, police dispatchers, parks and recreation employees, public works employees, utility workers and other City Hall employees -- received 3.6 percent annual raises for three years. The administrators received a five-year contract with 3.4 percent raise each year.

Let's do the math: The median annual salary for a firefighter is about $44,000, according to salary.com. If we started with that salary in September 2008 (it may have been slightly lower, but this is just an illustration of the numbers) then the salaries would be:

Year	Salary
2008	44,000
2009	45,584
2010	47,316
2011	49,114
2012	50,981
2013	52,918

For those of you playing the home game, that's an increase of 20% (((52,918-44,000)/44,000)*100) over the course of five years. Council 18 members see an 11% increase over three years, and administrators see an 18% increase over five years.

The Washington Post tells us that "State and local pensions plans are on path to failure":

Even if pension funds do manage to achieve that magical 8 percent average rate of return over the next 15 years, they will only have an average of 45 percent of the money they need to pay benefits, according to an analysis by state pension expert Kim Nicholl of PricewaterhouseCoopers. The picture for health benefits, which states are generally paying out of current revenue, is even worse.

It's worth reading the whole thing.

The Star-Ledger Editorial Board discusses a plan to tax students at local colleges and universities, highlighting why it's a misguided thought:

In fact, it’s an awful idea that burdens students and lets town officials delay tough spending cuts. It also frays the relationship between universities and towns, which should be collaborating on solutions instead of pointing fingers....

The resolution estimated the average municipality loses about 13 percent of the taxes it could collect "if all property within its borders were taxed." ... But taxing all property within a town’s borders would mean hitting up hospitals, churches and many other charitable and nonprofit institutions. Why should colleges be singled out?

There's more, too: Did you know that Seton Hall, although it's tax-exempt, pays "payments in lieu of taxes" and full taxes on its off-campus property? That adds up to $364,000 -- on top of which, it "contributed $500,000 toward a sports field for the South Orange-Maplewood community." This is a great editorial, not terribly long but very impactful, and also well worth reading.

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